Minimum wage to rise in Alaska to $8.75 an hour

Alaska's raise to its minimum wage comes as the nation debates pay increases for the lowest paid workers. Here, protesters gather outside of the McDonald's Corporation headquarters in Oak Brook, Ill., during the annual shareholders meeting demonstrating for higher wages and the right to unionize.

Voters in November overwhelmingly approved raising the minimum wage from $7.75 per hour to $8.75 per hour, effective Jan. 1. Because the state constitution calls for ballot measures to take effect 90 days after election results are certified, the raise doesn't take effect until Tuesday.

A second increase, to $9.75 per hour, is scheduled to take effect Jan. 1 under the initiative. The minimum wage is to be adjusted for inflation annually after that. (Oregon's minimum wage increased Jan. 1 to $9.25 an hour.)

Before Tuesday's increase, about 5 percent of Alaska jobs, or about 16,000 positions, paid $8.75 or less, said Dan Robinson, chief of the Research and Analysis Section of the state labor department. About 9 percent of jobs -- or 28,000 -- paid $9.75 or less, he said by email.

Affected industries include seafood processing and restaurants, he said.

The increase to $8.75 an hour, Alaska's first minimum wage hike in just over five years, will rank the state's minimum wage ninth, along with New York, among the 50 states and the District of Columbia, according to the National Conference of State Legislatures. Voters in three other states also approved increases in their minimum wages last year, and legislatures in several states and the District of Columbia also approved hikes last year, according to the organization.

Ed Flanagan, a former state labor commissioner and a sponsor of the initiative, said he is glad to see other states increasing their minimum wage and he would still like to see the federal minimum wage increase.

Initiatives sponsors did not claim that $9.75 an hour would be what one would call a true living wage, Flanagan said.

"But the whole idea is that it's a helluva lot better than what they were making before," he said, adding, "There's going to be people better off."

Dale Fox, president and CEO of the Alaska Cabaret, Hotel, Restaurant and Retailers Association, said concerns he has heard about the minimum wage increase mainly involve the equity of giving raises to employees who make "good money" through tips.

His group supports the concept of tip pooling that would include dishwashers, cooks or other back-of-the-house employees, workers that don't normally benefit from gratuities. That issue has been the subject of litigation.